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Social factors play a role in limiting the model’s effectiveness. For instance, membership in an MHO is often determined by attributes like religion or gender (Jütting, 2002). This will always present a problem for MHOs, especially in their efforts to enlarge membership. In the same way, measures have to be taken to protect the scheme from pitfalls such as adverse selection, moral hazard, over-prescription or fraud. However, many of these measures tend to be unpopular. Develtere et al. (2004) reported member dissatisfaction with initial waiting periods, mandatory affiliation of all family members, identity and insurance status verifications and exclusion of certain treatments. In self-managed insurance schemes like MHOs where the proximity between members is a trust factor, it is not difficult to imagine the difficulties in the application of these technical measures.

MHO membership is normally voluntary. However, faced with the problem of low enrolment, some organizations have attempted to make membership compulsory for the entire target group, or automatic (e.g. once you are member of an organization, you become a member of the MHO). In most cases, these attempts failed and were discontinued because of members’ refusal or because of a lack of capacity to ensure implementation.

The emphasis on financial accessibility or affordability results in low premiums and limits the benefit packages. Increasing the premium level could implicitly exclude current and potential members. This limitation is not intrinsic to the MHO-model, but linked to the MHOs’ primary target group, namely low-income people.

Last but not least, MHOs often have complex structures due to the diversity of actors involved, as illustrated in Figure 25. Initiating organizations play a role in the social mobilization process and can provide some technical support to MHOs. Technical support organizations (national or international, on a permanent or sporadic basis) are also involved and can have a significant influence when the scheme is new. Where they exist, federations strive to assume the responsibilities of the technical support organizations over time. Finally, the healthcare providers play an instrumental, although not always constructive, role. The variety and diversity of actors – each with a necessary short-term function – complicates an already complicated decision-making process.

396 Institutional options

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7 The term “external support organization” refers to technical and/or financial support organizations.

This section only deals with one aspect of their interventions, namely direct support to MHOs. For instance, the political input provided by ILO/STEP and others to influence social protection

reforms is not addressed in this chapter.

The community-based model: Mutual health organizations in Africa 397 Some choices were made. With a few exceptions, there was an implicit consensus that the benefit package and premium amount should be balanced from the beginning. Schemes do not offer more benefits than what members are willing or able to pay for. To a certain extent, financial sustainability and community-based learning processes were preferred by external support organizations to artificial short-term successes.

The social participation process needs time. However, the process is often difficult to support because of the limited timeframe of an external intervention and the contingencies of funding agencies. In practice, this has meant that support organizations have often had to stop or restrict their support at a time when MHOs still needed to strengthen their activities or their governing bodies, or overcome difficulties.

In general, support organizations did not attach equal importance to social and technical aspects. The community-based approach implies social mobilization, education, social cohesion and ownership. This led to an important emphasis on the social aspects of health insurance to ensure social viability and the permanence of the dynamics created, while insurance product design was sometimes neglected. This can be explained by considering the circumstances (i.e. limited choice between healthcare facilities, insufficient knowledge of healthy behaviour, low income, etc.). In addition, it took time to develop relevant methodologies, appropriate management tools and monitoring systems.

From the beginning, external support organizations made some rational choices, motivated by institutional sustainability preoccupations and/or cost-reduction constraints. Apart from not subsidizing claims, intensive financial support was often limited to the start-up phases. However, logically, leaders of fledgling MHOs faced many problems they could not solve due to their lack of know-how and experience.

Most support organizations use participatory approaches, which require an active involvement of the target group during the set-up phase, including data collection for the feasibility study. However, it is not easy to find a balance between the technical expertise needed for a feasibility study and the necessary ownership by the MHO’s members. Self-management and voluntary work are also part of this participatory approach, which creates a set of related problems as discussed above. There are solutions, for example paid professional or remunerated officials, but they raise the stakes for MHOs in terms of cost, autonomy and sustainability, and for the support organizations’ exit strategies.

398 Institutional options Many MHOs were created in isolation; networking with other MHOs and/or social protection systems at regional or national level was often not planned at the outset. Some external organizations did not originally favour this networking. Although some intrinsic features (especially the community-based one) could explain this oversight, it is now recognized that efforts have to be made to forge structural relations between the actors early on in the process. This is not easy, nor is it without risks. Ideally, each MHO should build its own identity before becoming involved in upper-level dynamics.

These observations demonstrate why it has been, and still is, difficult to find the appropriate balance between the nature of community-based organizations and the design of the support intervention.

6 What is the added value of this model?

The community-based model is not the easiest way to organize health insurance. The West African context, with its nascent democratization process, high levels of poverty, mismanaged healthcare facilities and limited availability of skilled human resources, certainly does not facilitate the implementation of this model. So what is its added value?

MHOs are more than just institutions selling insurance to clients. In this respect, MHOs have to be assessed not only on the effectiveness of their insurance provision function and their potential role in the extension of social protection, but also taking into account the effect of their social participation processes.

Access to healthcare in Africa (and elsewhere) is not only a matter of insurance. Most existing statutory social protection systems in Africa are not effective (see Chapter 1.3). Reform processes are underway in many countries, but it is obvious that successful social protection reforms need to include input and representation from the population. It is also recognized that reformed social protection systems will include a range of public as well as private tools (ILO, 2002c).

Intrinsically, MHOs have some added value. Through their non-profit nature, their non-exclusion policy and their low premium, they guarantee access to some services, even if the coverage is limited. Participation not only contributes to the client’s satisfaction, but also to empowerment and learning. In this respect, MHOs create advantages through their embedded control and participation mechanisms. Although research on participation mechanisms is still required, MHOs are part of the democratization process.

Moreover, one advantage of this model is its influence over the management of health services (management transparency, security of financial resources, The community-based model: Mutual health organizations in Africa 399 etc.) and its ability to improve healthcare quality (see Box 79). The size of the MHO strongly reinforces this power. While the power should not be overestimated, some pressure can be put on health systems, especially when MHOs are organized into a federation. For example, many MHOs are taking action to get rid of public agents who do not carry out their duties.

The power of collective actionBox 79

In 2004, when asked to renew their premiums, no members of Réseau Alliance in Borgou-Benin wanted to do so. The reason was that the midwife of the dispensary contracted by the MHO had decided that she would not attend to pregnant MHO members during the weekend. The official of the network “Alliance Santé” organized a village meeting with both members and non-members. The midwife had to apologize to the participants and commit herself to avoiding any discrimination in the future. Following this meeting, the number of insureds increased from 1,000 to 1,200.

This power also exists in the negotiation of prices for services delivered to members. Some MHOs have obtained lower fees for their members.

Although this is not always the case, this fee reduction can be seen by healthcare facilities as an added value in being more financially accessible to the population. Empowerment of the members who learn to influence the quality of healthcare is also an added value for MHOs compared to non-self-managed modes of insurance.

7 Conclusion

Mutual health organizations, a community-based model for insurance provision, have been active in West Africa for over a decade. For many people, it is the only “formal” social protection they have. The model is fraught with problems, but a clear understanding of their origins helps to identify solutions that can enable this approach to fulfil its potential in being more than just an insurance mechanism.

Nowadays, other models (e.g. health microinsurance products offered by microfinance institutions like AssEF in Benin) are also seen in West Africa.

Many try to adopt the community-based philosophy of MHOs and inherit the advantages of the model, while increasing effectiveness by improving the functioning and increasing the scaling-up potential. Although it is too soon to judge whether these new approaches will succeed, this evolution toward a more diverse landscape of health microinsurance models is positive and could provide wider coverage through collaboration with NGOs, microfinance institutions, cooperatives and the like.

400 Institutional options Despite this positive diversification, some questions remain. For example, how can community-based health insurance systems be better supported to fulfil their multi-purpose functions? Moreover, are these health microinsurance systems relevant without a broader redistributive social protection mechanism?

4.4 Institutional options for delivering health microinsurance Ralf Radermacher and Iddo Dror1 The authors appreciate the detailed and useful comments provided by Klaus Fischer (Laval University), Bénédicte Fonteneau (University of Leuven) and Michael McCord (MicroInsurance Centre), as well as the stimulating discussions with David Dror (Erasmus University Rotterdam) and Gerald Leppert (University of Cologne).

Health insurance entails the transfer of health risks in return for a premium payable in advance. This succinct description suggests that the arrangement entails flows of funds and information in two directions: from the client to the insurer and from the insurer to the client. The party with the most control of these flows of funds and information can influence the business process to its advantage.

This notion that one party would seek an advantage over another implies that conflicts of interest can occur between insurers and insured. But is this the case in health microinsurance provision? And if so, does the institutional option (model) for delivering health microinsurance have an influence on such conflicts of interests and efficiency in the provision of insurance? This chapter looks at these questions by offering a basic typology of the different business process options identified in health microinsurance provision. Such a typology will help identify conflicts of interest and remedy inefficiencies in the smooth bi-directional flow of funds and information.

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